Burberry CEO Marco Gobbetti Stepping Down to Join Salvatore Ferragamo | News & Analysis

Burberry CEO Marco Gobbetti Stepping Down to Join Salvatore Ferragamo | News & Analysis

Burberry chief executive Marco Gobbetti is quitting for a new position at struggling luxury shoemaker Salvatore Ferragamo, a position that will allow him to return to Italy and be closer to family, the companies said Monday.

Gobbetti was brought in to turn around Burberry’s fortunes in 2017, but the company is still lagging peers. Sales have slightly declined year-on-year since Gobbetti joined the brand, as creative director Riccardo Tisci’s designs underwhelmed critics and consumers alike. Over the pandemic, sales continued to slide, dropping 10 percent for the year ending March 27, 2021.

“The departure of Marco Gobbetti seems the seal on a partially successful brand turnaround,” Bernstein analyst Luca Solca wrote in a note. “In reality, Burberry is in a far better position today than when Marco took responsibility for it. Yet, the magnitude of the issues at hand didn’t offer a chance for the runway success that some had hoped for.”

Gobbetti will remain in his current role until the end of the year, Burberry said. Burberry is yet to find Gobbetti’s successor. The brand said chairman Gerry Murphy will work closely with Gobbetti until his departure to facilitate a smooth transition period. The company’s share price fell as much as 10 percent in morning trading.

Gobbetti is leaving Burberry for another “monumental challenge,” according to Solca. Ferragamo is one of the few independent luxury brands with global name recognition left, but it suffered years of lacklustre sales before the coronavirus pandemic dealt a significant financial blow to the label.

In 2020, revenue dropped 33 percent to €916 million ($1.1 billion). Losses before interest and taxes were €62 million last year, compared to a €150 million profit in 2019. It was the brand’s first year of losses since the company went public on the Milan stock exchange in 2011.

Beyond finances, Ferragamo is also struggling with pressures internally and currently has no creative director. In March, BoF reported creative director Paul Andrew’s imminent departure amid a broader shake up to its board of directors, including the departure of Chairman Ferruccio Ferragamo, who was replaced by his brother Leonardo.

Gobetti will take up his new position at the Italian label as soon as he is released from his contractual obligations, Ferragamo said.

Stay tuned for BoF updates to this developing story.

Related Articles:

Paul Andrew To Exit Ferragamo in Company Shakeup

Burberry Sales Rebounded in June. Why Did Its Shares Plunge?

Riccardo Tisci’s Burberry Challenge

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